Best Practices

Strategic Partnerships

By: Joshua Schultz
Corporate VP, Strategic Account Leader

Core elements of strategic partnerships

Facing intense competitive and financial pressures to accelerate product development while continuing to cut costs, many biopharmaceutical companies are moving beyond traditional outsourcing relationships and exploring new types of strategic partnerships designed to deliver a much higher level of benefits throughout the product development lifecycle.  Achieving those benefits requires a new partnership paradigm that is characterized by deeper and more-complex relationships between a biopharmaceutical company and a small number of partners – usually no more than two or three.  Under such a strategic development partnership with a major biopharmaceutical company, a CRO or other service provider would typically provide a broad array of services encompassing multiple therapeutic areas, business functions, geographies, and compounds over a period of years.  For small to mid-size strategic partners, the services might include a full range of early-stage clinical development and regulatory services to help move promising novel compounds forward from the research lab into early-phase testing designed to demonstrate product viability and value for potential partners or buyers.  These strategic partnerships focus on the areas of product development where the most valuable improvements can be achieved: project oversight cost reductions, and time savings.

There are four core elements that differentiate strategic partnerships from the project-by-project or transaction-based relationships of the past:

• Commitment between the partners – The senior management of each partner must be firmly committed to the value of the relationship and be willing to commit the appropriate level of resources to strongly support the success of the partnership over the long term
• High levels of trust – The partners must be willing to share information that goes well beyond the usual “arm’s length” relationship to promote full visibility, transparency and a high level of trust between the partners – elements that are essential for the partnership to achieve optimal benefit for both parties
• Mutual investments – The close, long-term relationship between strategic partners allows for mutual investments in operational integration, technology linkage, and other productivity improvements that help to maximize the business results of the partnership
• On going executive-level involvement – Senior staff members from both organizations must be dedicated to maintaining the relationship and supporting on going collaborative planning, operational innovation, process improvement, and the sharing of best practices

In short, both the biopharmaceutical company and the service provider must be prepared to share the risks and benefits of a strategic partnership if the relationship is to achieve its full potential.

The benefits of strategic partnerships

How do these core elements help deliver the reduced oversight costs and development time savings that are the key benefits of strategic partnerships?

Savings from reduced sponsor oversight requirements – By working closely in partnership with a CRO or other service provider on major development projects, a sponsor requires fewer internal resources to oversee the projects.  Instead, oversight is supported by agreed-upon quality specifications, project metrics, continuous quality control, and close communication between the sponsor and the service provider that is enabled by a longer-term relationship.  Other drivers of reduced oversight costs from strategic partnerships include:

• Explicit “trust but verify” points
• Robust governance
• Dedicated staffing
• Convergence of technologies and operating processes

Time savings – The most significant partnership savings result from reductions in development times.  Those savings could exceed many millions annually for a major development partnership over a period of years if the right processes are implemented to reduce critical path cycle times.  Such improvements would typically include: 

• Standard metrics and operational guidelines that can be quickly implemented for a wide range of projects 
• Country-specific documentation repositories that avoid translation and development delays 
• Pre-established data formats 
• Pre-developed contract and informed consent documents with deep back-up language that reduces the amount of escalation to legal/regulatory staff 
• Proprietary patient recruitment technologies that provide greater predictability when used with sponsor teams
• Extensive databases of available investigators and sites; and many other established procedures that accelerate timelines.  

While the time savings would be different for smaller companies taking advantage of strategic partnerships, they could also benefit from a significant increase in the value of their novel therapies if successful early-stage/proof-of-concept studies are completed expeditiously. 

The ultimate benefits for biopharmaceutical leveraging strategic partnerships with the right partner should include:

• Significant improvement in clinical productivity and cycle times
  • Streamlined processes
  • Improved transaction processing
  • Quicker start-ups due to advance planning 
• Reduced,  more-predictable costs
  • Lower internal management oversight costs
  • Ongoing innovation focused on all major cost drivers
  • Fewer change orders due to on going monitoring and intervention
•  Faster time to market 
  • Improved data efficiencies with integrated e-Clinical software
  • Early strategic engagement of regulatory experts in clinical development planning
  • Maximum potential for product success by incorporating regulatory, market access and commercial strategies into the trial process  

Although the future of the biopharmaceutical industry will remain challenging, the new paradigm of strategic partnerships offers viable, proven pathways for every size and type of company to overcome the obstacles and achieve market success.